Driving Record, Age and Vehicle Type Are Major Considerations
LOS ANGELES, May 15, 2025 /PRNewswire/ — Prices for just about everything are on the rise these days, and unfortunately, that includes car insurance. Now more than ever, consumers are looking for ways to lower their auto insurance premiums. However, in order to maximize these savings, it’s important to first understand the different factors that insurance providers look at when setting their policyholder rates.
While there are a variety of factors that affect car insurance rates, your driving record is one of the most influential.
“Unlike other factors, your driving record is one that you have some control over. Drivers with a clean motor vehicle record and no at-fault accidents typically get the lowest car insurance rates,” said Kevin Quinn, Vice President of Auto Claims for Mercury Insurance. “Other key factors that affect your rates include your age, the vehicle you drive and where you live, among others.”
Here’s a detailed breakdown of the main factors that generally affect car insurance rates:
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Driving record: Insurance companies use a driver’s past as a predictor for future risk. Even just one speeding ticket or accident could raise your rates. Insurers typically look at your record from the last three to five years, but more serious violations like a DUI or multiple speeding tickets might follow your record for longer.
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Age: Age is another big factor that affects insurance rates, especially for younger drivers. Data indicates that teenagers are riskier drivers, so they often pay more for auto insurance. As drivers become more experienced, their insurance premiums tend to decrease, with the lowest rates generally afforded to those in their mid-50s before rising again for seniors.
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Location: States with laws that mandate more coverage types and/or higher coverage limits will likely have higher auto insurance costs — even certain ZIP codes can have higher rates. “If a policyholder lives in an area that is more prone to vandalism, like a big city for example, car insurance premiums will be higher because the possibility of that policyholder filing a claim is greater,” added Quinn.
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Vehicle type: Before driving that shiny new car off the lot, think about insurance for it. There are several types of cars that generally cost more to insure, including high-end sports cars, luxury cars and some electric vehicles. This is due to their parts costing more to repair or replace after an accident. An EV battery, for example, can cost thousands of dollars to replace if damaged. Generally, cars with strong safety ratings, lower repair costs or advanced safety features cost less to insure.
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Credit score: Many drivers are likely unaware that their credit score is fair game for insurance companies when setting rates. Data indicates that drivers with poor credit file more claims than do drivers with better credit — and more expensive ones, too. However, a handful of states — including California, Hawaii and Massachusetts — have outlawed or restricted the use of credit scores as a rating factor.
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